Hydro-power is no longer what it used to be
during the golden 1970s when the whole region was engaged in dash for hydro.
Most of the best sites have already been developed and new sites face environmental
restrictions so the long run marginal cost of hydro-power has increased relative
to other alternatives. Today hydro faces stiffer competition from thermal
power. The change in gas-fired power generation technology has made a difficult
case even worse. A key feature of investments in hydroelectric power generation
projects is that they require long term loans with extensive grace periods
because they are capital-intensive, have a long construction phase with
significant risks and have a long useful life. As a result, private developers
prefer thermal plants. It is not only the environment that is conspiring
against hydro development.
Nevertheless, there remain many instances
in which hydro alternatives still may be the most economical way to produce
power. Hydropower will most likely constitute the main source for Brazilian
electricity for at least a decade., Venezuela still has not completed its
development of the lower Caroní River Basin and may have interesting sites in
the upper basin. Other countries, such as Peru and Ecuador, may either
experience some delays in joining the dash for gas or may have important and
competitive hydro developments available.
While there are still some old faces in the
pipeline of potential projects involving large dams (some cheap and relatively
problem- free like Corpus in the Paraná River, some more questionable like
Boruca in Costa Rica), there are new sites like Cheves, a 520 MW high head
project in the Huaura river in Perú, which for one reason or another didn't
figure prominently in the old expansion plans of the golden age. Also,
neglected by the earlier inventories are small and medium size sites or even
scaled down versions of old projects. The development by the private sector of
smaller, 25 MW, high head and relatively environmentally sound projects in
Colombia and Costa Rica is an indication of what may lie ahead.
